Sempra and Woodside in potential LNG deal

US LNG exporter Sempra Energy announced on Wednesday that the company has signed a memorandum of understanding with Australian oil and gas company Woodside Petroleum for the development of an LNG facility in the Port Arthur site located in Texas.

This understanding is non-binding but will allow for discussions and assessments regarding a potential LNG export terminal.

Sempra’s proposal of an LNG facility at Port Arthur includes two liquefaction trains that have a combined export capacity of about 10 million tonnes per year, or 1.4 bcm (49.4 bcf) per day. The plan also calls for LNG storage tanks and marine equipment that would allow for LNG ship berthing and loading. US financial services holding Citigroup has predicted that the terminal could cost as much as $8.5 billion to construct.

If Sempra’s application for the proposed facility is approved by the Federal energy Regulatory Commission, the company plans to begin construction in December 2016 with the first LNG in 2021.

Port Arthur is located 140 kilometres east of Houston and has the permits required for an LNG regasification terminal.